US agricultural sector analysis on pesticide externalities – the impact of climate change and a Pigovian tax
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Residuals from agricultural pesticides threaten the environment and human health. Climate change alters these externalities because it affects pest pressure and pesticide application rates. This study examines damages from pesticide externalities in US agriculture under different climate projections and the effects of alternative regulations. We find divergent impacts of externality regulation and climate change on agricultural production in the US. A Pigovian tax on pesticide externalities generally increases crop production cost, but farm revenue improves because of increased commodity prices. Climate change generally decreases US farm revenue because production increases and prices fall. Results also show a heterogeneous effect of climate change on pest management intensities across major crops.
KeywordsClimate Change Climate Change Impact Pesticide Application External Cost Climate Change Effect
This work has received partial funding from the International Max-Planck Research School for Maritime Affairs, the European Community’s Seventh Framework Programme (FP7) under grant agreement No.212535, Climate Change -Terrestrial Adaptation and Mitigation in Europe (CC-TAME), www.cctame.eu; the Integrated Climate System Analysis and Prediction (CliSAP) cluster of excellence at Hamburg University, the Michael Otto Foundation for Environmental Protection, and the United State Environmental Protection Agency (USEPA).
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